Question

'Wages outstanding' is appearing in the trial balance of a company. While preparing Income Statement and Balance Sheet, Wages Outstanding should appear in __________________.

• A. the balance sheet only
• B. income statement only
• C. both income statement as well as balance sheet
• D. None of the above

Answer 1

The correct option is A the balance sheet only

Outstanding wages is that which is due but the payment of which is not done. Outstanding wages is a liability to be shown in the balance sheet along with the debit to the wages a/c.

If the adjustment entry is already passed, outstanding wages account will appear in trial balance. In such situation, wages outstanding should only appear in balance sheet.